The influence of crop insurance agents on coverage choices: The role of agent competition

We examine how competition among crop insurance agents affects coverage choice in the federal crop insurance program. Agents may influence producers’ insurance decisions to maximize their total compensation. We develop a theoretical model of producer–agent interaction to examine how loss potential, agent compensation mechanisms, and market competition affect the coverage level selected. Using crop insurance unit-level datasets from five states, we find evidence that agent market concentration and agents’ market share matter in the insurance coverage decisions of producers but that the economic significance of the influence is relatively small. Agent influence over coverage level, premium, and liability choice is generally positive but inconsistent across states, which may be attributable to differences in loss risk and agent compensation mechanisms

Journal of the American Veterinary Medical Association 199 2 190 196

Nine dairy herds (mean size, 149 cows) with bulk-tank milk somatic cell counts of 80% of cows with Dairy Herd Improvement Association linear somatic cell counts >= 4 were selected for study. Each herd was monitored for 12 consecutive months. Duplicate quarter-milk specimens were collected from each cow for bacteriological culture at the beginning of lactation, cessation of lactation, and at the time of each clinical episode of mastitis. Streptococcus agalactiae was never isolated and Staphylococcus aureus was isolated from <1% of all quarters. There were 554 episodes of clinical mastitis. During the year of study, the incidence rate of clinical mastitis varied from 15.6 to 63.7% of cows among the 9 herds. Mean costs per cow per year in herd for mastitis prevention are given. Mean cost associated with clinical mastitis was $107/episode. Approximately 84$90) of the costs attributed to a clinical episode were associated with decreased milk production and non-saleable milk. Costs of medication and professional veterinary fees per clinical episode varied significantly among the 9 herds. Three of the herds did not have a veterinarian to treat a clinical episode of mastitis during the year of study even though 2 of these herds had the first and third highest incidence rates of clinical mastitis. When calculated on a per cow in herd basis, mean costs of $40/cow/year were attributed to clinical mastitis. It is suggested that herds that have effectively controlled mastitis caused by contagious pathogens may still have substantial economic losses as a result of clinical mastitis and that losses and even rates of clinical mastitis may vary considerably among such herds.

Hedging dairy production losses using weather-based index insurance

This article proposes a temperature-humidity index insurance product and examines whether this product can effectively protect against the risk of reduced milk production caused by heat stress. Results suggest that even when premiums are at higher than actuarially fair levels and the insurance purchaser is faced with both spatial and temporal basis risks, a temperature-humidity index insurance product would provide risk management benefits to a representative south-central Georgia dairy producer. Copyright 2007 International Association of Agricultural Economists.